GTN - Earnings call transcript Q4 2019

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter 2019 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Hilton Howell. Thank you. Please go ahead, sir.

Hilton Howell

Thank you, operator. we people that in informed been have still several queue. We’ve

of we decided of we go meat to morning, our to call. you we’ve CEO XXXX am to need I’d get discussion like but start the fourth before So and all things Hilton since to Howell, Gray welcome Chairman this Television. preliminary through into earnings quarter our I some the

have exceptionally chosen when week, markets to pleased our morning that we’re spend us. you join And time during the and to melt continue this us with down, your

As Co-CEO, Chief usual, Development Financial Chief I’m Officer, joined LaPlatney; and Ryan. Jim today by our President Legal our Officer, Pat and Kevin and Latek; our

this disclaimer with a begin provide. that will morning will We Kevin

Kevin Latek

the matters forward-looking results. number a included obligation may in could discussed most in these Thank release. results Hilton, to from with update and recent SEC are uncertainties. you, forward-looking company’s this Actual statements statements. future the those operating among in company undertakes the The Certain statements include other Those things, statements reports the forward-looking risks and various described a subject future and good of everyone. result important regarding, today’s set in call differ as to in filed forth factors no of earnings morning,

uses website address key as www.gray.tv. source a is of Gray its website company information. The

as public measures measures of measurements, ratios. free to replace investor adjusted but statements. the particular, will operating within and broadcast our website reconciliations financial in assist our cash supplements provided reported earnings well Included in flow, updated to and flow our to valuation flow, as about Included are our release deck measures, post the are leverage analysis discussion non-GAAP a in EBITDA corporate of be to call cash their an of website financial are metrics the on meant in cash as flow, expenses, certain weeks. We the will non-GAAP cash These company. GAAP also broadcast less and two not the GAAP financial

I’ll call Hilton. now turn And to the

Hilton Howell

Kevin. Thank you,

We the year results. results of are quarter and exceptionally pleased to of report our XXXX the full fourth

As already smaller year. on subsequent know, acquisition as Gray affected X, Raycom well our acquisitions have of January those several positively These XXXX, in who of we as our transactions you follow completed the results.

for income Our was net quarter total as-reported million. our revenue the And $XX $XXX million. fourth was

and and flow new we a And adjusted simply which our cash broadcast our EBITDA $XXX in records fantastic was Our was best EBITDA $XXX set million. million. significantly expectations. adjusted flow This broadcast quarter cash quarterly revenue exceeded ever our for was collective

or topped the was year increase For a which XXXX. revenue $X full XXXX, billion XX% billion, our $X.X over

for income was million. XXXX net $XXX Our

$XXX And broadcast our Our million. cash million. was in adjusted $XXX was XXXX flow EBITDA

revenue for new cash Our annual and flow. has records performance year set this broadcast

than full our flow and issued our was cash in cash a significantly exceeded XX% $XXX than free which was higher free XXXX of million, was the which our last On acquisitions X% historical XXXX, adjusts our in cycle. $XXX the for XXXX higher million, also cash higher year political for Our advertising was range. than two-year that flow XX% which flow XXXX dispositions, XXXX, basis combined free guidance year and half previously

produced political revenue. for very high posted political. to full what advertising The And political million be Turning initially expectations. exceeded political our revenue again was that $XX had to $XX year We the XXXX, quarter seemed advertising revenue million. of advertising well fourth

full the revenue full than which XXXX. advertising our fourth again, adjusts basis, year our political XXXX’s And greater of fourth of was on advertising political was comparison, for a M&A combined revenue XXXX’s revenue. political quarter activity, the than XXX% year higher For historical in XXXX XXX% quarter

off to start are political about avenue this bullish year. We are a revenue XXXX fine and – for prospects

and available million or $XX for stockholders, or fourth net $X.XX per Our quarter the $X.XX expenses income share per was the excluding transaction-related compensation noncash million year $XXX common and full for XXXX. to share

of it great AP Edward Gray’s XX from our and colleagues could only local Association records was XX nearly a places XXX XXXX be Last in awards, proud Maine We awards for milestones between. a year of new lot awards, collectively journalists a and awards, awards. Florida stations of Television, real in another Gray their Broadcast year and Emmy Hawaii to also and XXX of and television Alaska great the prestigious R. our Murrow their work including more difference State and year, X,XXX whole individual not was communities. not making stations of won

results with the In advertising that the quarter. displacement quarter national stabilized out fourth an markets, quarterly Both political showing finished best when local And core the factor national we core the you of again. and local business, reveal several awful revenue growing is advertising fourth in and the in core quarters. for advertisers our that crowded in demand the our lot of core and terms

the the forward this broadcasting year finished, New very this FOX our the core are to quarter we felt demand Super heavy we looking CBS are the and from fourth Year. ABC, much In very quarter the and NBC and Bowl year pleased political of XXXX short, revenue is and by the how despite stable Likewise, same first stations year. with the showing resulting greater-than-usual displacement

open earnings And concluding Jim Kevin will some color some I today’s any release. make now then will of thereafter, and your Pat, questions. and line to add remarks to the additional

Pat LaPlatney

stations will OTT inventory service. of announced a Premion, Hilton, access everyone. partnership Tegna and which our with good to Premion’s morning, Thanks, will as local interest and and minority Yesterday, gain local in resellers Gray Gray ownership acquire a jointly strategic

you of platform. many advertising As OTT industry-leading Premion is know, Tegna’s

most and advertiser-friendly In ad marketplace fact, Premion most is today. local one in of the probably platform prominent the the

on-demand than Premion, our a By other video space. inventory premium, stations devices own their and to be live broader alongside able the apps. revenue to our sell will digital way clients’ Premion advertisers competitive platforms websites will and in long stations video their be compete networks, forum, their grow better streaming very and station our Through and able channels, local ad place of to to using messages on

clear, that These our And fine all much Raycom, we be strategy To Gray by we digital and are own brought done integration now apps. control our regard, in under does digital websites and really still digital and inventory Gray the as digital have stronger clear have the teams Premion not at change results. two vendors work previously media. in in-house producing a completed of outside efforts business the

across the first time. million platforms of for in of our digital in traffic crossed Just terms users December XXX XXXX, we unique

visitors. visitors. same-station severe For increase following a to December, million increase plays the year XX% a weather we increase traffic on XX% in XX% video products full saw we saw grow digital record-breaking are in because XXX a viewers. more own events, unique basis, local in a of in Clearly, even primarily a Then and with our January, sessions, resonating

importantly, as content exactly better doing In advertisers of digital quarter particularly better Gray’s are a each reseller are consumers traffic, the ensure sales video. monetizing and job and the today. short, Just arrangement Premion and this we’re operations own products where plus moving our

continue national own two we our terms to milestones started and surpass earlier year In internal initiatives, expected. programming the our strong, of than we

joint new has shows, to which a Recall audiences. X among with XX-XX we splash the made with The Hospitality its that have quite of launched subsidiary a intelligently out network and launched target of and We is are a multicast Opry First, gate. Ryman linear January original success a XX Ryman Entertainment service Properties. Circle is investing Circle venture in on called make right more development. Circle Group, the

average For comparison, basic runs cable per about XX the year. network originals

Circle distribution that You households, months bit households. than of U.S. U.S. other in, Today, just with recall Circle’s broadcasters. is XX% by stations Meredith, aiming in more reaching of television to XX% total may we Gray CBS, TV Circle distributed thanks Tegna, partnerships a and to roughly were television launch two

a Van Our is a of great Press high-profile a second doing Greta show. in with Washington Court The Gray which is of with of September job the Sunday top-notch, initiative production political launched local create of to is stations number program different guests. policymakers resources Susteren, television and melding national with Full kind

set that markets. envision We our however, starts. launching the now XX% of in programming any not, including in to additional each top cleared on of country, to over efforts these we very them. networks Circle Full initiatives do is and focusing XX Full that for report or programs great surpass Court we’re off goals national term. the Press sure Instead, We’re meet Court the the pleased and are making Press near

anticipating produced they and This to XXXX, Raycom. Sports, Raycom This flat Collectively, between annual to in approximately and XXXX million companies. In me cash XXXX, our comprises the a flow. video in RTM of Tupelo quarter $XX by and Studios million of offset revenues $XX of production of million group were revenue $XX expenses their decrease expenses. a first brings positive drop we’re about

down production quarter, produce offset decline a be as last production is longer Revenues rights advertising revenue improve, production see by of at company’s companies associated After expect the well couple them in the The and certain collegian primarily basketball football because and no fees in distributes Raycom will sells loss Sports games. and the should XXXX first margins higher years. in expenses so revenue. the as we production additional to than a margin

Kevin. the turn to I’ll now call over

Kevin Latek

usual I’ll begin Pat. with you, Thank as retransmission.

in today’s we saw full our million release year. retransmission of slightly posted revenues figure combined of $XXX for ahead that of the gross was historical year For XXXX, full That basis. about on $XXX you million the our guide

million first quarter grocery anticipate $XXX currently we ahead, revenue Looking the of million XXXX. for $XXX to transmission

in due third fourth increases Retransmission of to revenues during are year. and into that this the weeks higher several will first phasing place rate be the quarters second,

do retransmission for major emphasize and we retransmission when each higher three be of last retransmission Upon year negotiating gross agreements provide able the revenue that are first full quarter will successful this this conclusion, to will expense. to in compared want to guidance of XXXX, the of We at I our be time. year. retransmission though quarters two the revenue

of of agreements terms from from reached base had the the consent current – from next also paid movement of to and XXXX incorporate MVPD remaining XX% was well as of comprise covering XXXX, percentages repricing the recent among earlier, because beginning These beginning vast over losses MVPD we renew XX of sub reprice paid base. covering contracts renewal our In The mid majority the MVPD for the sub year, current of this XX% XX months, be subs XX% we sub of the with providers expiring about sub sub our to as MVPD retrans end and add total updated in will of want At up that that our contracts our I retransmission XXXX. agreements our provided figures base. essentially MVPDs. in are we flat will about they and the base.

Today, set revenue. political of all-time $XXX year Turning revenue to revenue in on strong basis. be combined this raising We break million we with enough XXXX high XXXX, million we will last to that our advertising announced very full $XXX We a our range guide feel political year that comfortable for historical advertising a we political new million. in that call guide. we full the anticipate when to are booked $XXX to

than And guide The developments aggressive into numerous large we the only in entered expected we encountered then in ad thought presence. increased have a Mike the we out very then race, call, positive last that Steyer going we our where of for soon and noticeably environment stronger quarter. Tom In which period. XXXX after presidential the and a ended, fourth the we quarter Bloomberg South trends our of spending much quarters string his support Carolina, the was the latest pointed political in fourth call would had

quarter, by a results. our and not noticeable political political To over-delivery did on account all our fact this impact fourth inning in but the from Mr. the in had of our on quarter exclude guide. the Mr. guidance This that Steyer, for contrary, Bloomberg if fourth advertisers they and They were in we are the Mr. our Steyer, two adding money still than campaigns both our tells a revenue quarter high exceeded advertising end the of Mr. guidance, already more fourth their robust. our is very XX%. to that us political incremental Bloomberg market

In total. of $XX.X political XXXX, revenue about XX% from received which about campaigns, advertising million we the is presidential

Hampshire, for figure the in presence has states political early South four remember Carolina. campaign Gray Iowa Nevada a strong an a of the While presidential New in and and that cycle, large off-year

firm. We in at of political of also The by performed share of into the XX review audit the our that on outside markets quite accounting market terms buys than well last their in an over XXXX increased markets. came are the year slightly audited our legacy political in by which percentage X XXXX. operate legacy of larger stations, the stations, whole Raycom point more Gray in markets spending than share XX

their points political by The XXXX. legacy increased over X shares Gray stations in XXXX

Given local company that our The is are always an groups is stations fact believe comprised of strong to new very both lots we facing sides in the to of is part achievement a on that that these stations Gray we the increased of shares shares. achievement maintain of of it due competition, scale in remarkable both top-rated Television.

the puts political a earnings at We’ve most to XXXX, by in Our looking XXXX, political also recent release recent advertising prior presidential context back revenue year year. gone election. non-presidential and the XXXX’s in election back numbers at looked most

all KDLT the – striking. same-station that by United, and stations For in we XXXX. a are prior this Raycom, same-station exercise, WVR of consisting only acquisitions to Gray occurred The WVIR comparisons owned created dataset

political revenue landscape did bodes XX% political all the revenue looks full better it now XXXX higher XXXX quarter was for was pre-presidential XXXX, XXXX year XXXX short, the than well higher Moreover, and XXXX. that than XXXX. of year very revenue. Full political advertising significantly quarter In the-just-completed XXXX. was and different Fourth than year XX% advertising in fourth advertising than

the has parties Kentucky This firewall time very the House, White Control Gray this we in of Colorado, which most Carolina, competitive competitive campaign to seats parties spending is lose Democrats races. Senate three Georgia. should the both and significant And any news fully in fully Senate to by just or presidential The and stations committed top-rated in Maine, issue broadcaster super seem is see Alabama, means most flip races, political most a PAC Senate four to if around, they the North Arizona, Senate year. much the local control. of The engaged place. take in need the both

thereby or shot wrong, In In advertising. Democrats perception addition, need flipping and at seats that Right to in political and total, and their ending fuel House House engagement President control some believe flip of the even control. elected to the Republicans a peace have investigative against XX take real powers Trump. that more Republicans the could back

Gray’s of XX year. we markets an race this terms In house have with open footprint,

went with Trump We markets a for held district have XX in democratically a that seat in XXXX.

and range advertising current million sorry, combined political range very $XX $XX for million in revenue of closing, in we a year. of political to $X on By quarter, million $XX quarter just XXXX. estimate million we In year, over current prospects the quarter XXXX For advertising be should revenue the revenue about clear of revenue. million – historical first had we of excited rest for now of comparison, advertising this the first of the the a estimate that are the it political of advertising $XX in political a basis, we

I’ll to Ryan. now Jim turn call over the

Jim Ryan

morning, Good Kevin. you, Thank everyone.

a that will the release earnings and information. be great XX-K filed of usual, the deal As today provide

call to and which in and basis, GAAP our combined release, we information occurred results always, on X, dispositions basis, all historical acquisitions had a As of a as-reported additional the present January those we then on earnings XXXX. we as gives which on effect if report

if would you As quarter. XXXX quarters local XXXX. political pleased factor over the showed have fourth improvement full think we’ve up We a to year Core in was results quarter flat displacement, with X%. But low up very single already mentioned, core we of previous was marked overall XXXX, the for and the national digits. it we’re been

was we already – of political anticipated. million was mentioned, As what ahead $XX far at

both and And million, full $XXX cash free year expected, previous December on flow X.XXx for our all hand of cash leverage flow netting and XXXX. $XXX respectively. million on decline basis, $XXX nicely ahead continued million, and X-quarter XXXX of a ratio to was guides $XXX cash trailing operating million XX, were at was Our to our as

demonstrate Bowl much and our also on displacement continuing local CBS select Super Super of affiliates. QX Super which Turning XXXX and the versus improvement of continue But on impact larger Bowl to X.X% national million the FOX was the the markets year-over-year us XXXX. Bowl Core considering CBS the $X.X after $X.X slate in to political stations over XXXX FOX on versus FOX FOX the Bowl Super Bowl XXXX in for last million generated Super about XXXX. $X.X million in up was for our in in us. XXXX, XXXX

As states dramatically million year increased exposure And $XXX of QX Kevin amounts. indicative million not is already our retrans to full and reflects the of to primary year $XXX million guidance to above mentioned, $XX political the guide the XXXX. early the gross million $XX of prior is

Looking ahead million. $X.XXX fall forecasting fourth year advertising vast $X.XXX revenue, We of full we to are expect majority still $XXX million the currently quarter again, revenue, of range billion Political XXXX, $XXX billion revenue. the the will XXXX. is the of at to total that in

amortization, or range $X.XXX anticipate of $XX stock Total operating in noncash would expenses evenly billion currently $XX And be television include corporate. before disposals, $X.XX split to it that That be range would a depreciation, billion. between to million, comp. million of we and gain/loss

Based the guidance, our of side flow be operating approximating XXXX our on million. cash for high will $XXX operating

the XXXX interest, cash Our million. $XX approximate preferred million primary dividends operating uses to $XXX of flow currently of estimated cash are of

million. to estimates million $XX $XX of That’s the concluded it’s we And year. excluding Our our middle And capital million our previous repack of as to on XXXX. increased the early expenditures, we forecast from based a updated XXXX. reimbursable for have cash increase expenditures $XX taxes, our tax estimate

free and Our million $XXX number a OCF cash uses million. on approximate approximate based $XXX those cash will

to the transactions material X-quarter currently in basis, cash and at of between cash all all X.X anticipated X.Xx assuming XXXX. XXXX netting on Our trailing M&A leverage and no ratio end net range a of is

call turn point, to Hilton. back the I’ll At this

Hilton Howell

you, Thank Jim.

a The We earning have better, are complete. more into one now gone and Television. the and our and could people larger integration Gray is of bit year not operating than essentially integration companies our much the

we combined new have have operation great more balance June As we when predicted two efficient, and sheet. robust in smoothly transaction announced and delevered integrated the rapidly initiatives cash of XXXX, the we Raycom programming revenue companies, made launched generated the flow,

in that team an for and lookout the the a company in opportunities small broadcast prudent make more stronger this industry. M&A Today, remains and Gray fashion and large would player grow our on even

M&A the fairly that think revenue we political keep of the likely However, is rest sidelines. year, sellers as advertising the opportunities for remain the will quiet market and potential on

company exceptionally are the built. proud of We we have

We efficiency, have margins, and importantly, people portfolio among quality most any the people, media company best at today.

had so, market the to its for begun not the or to prior company news concerns all the raise past see the full macroeconomic virus has ahead. that still of week right this shown a and the appreciation valuation of market over we While future

fully not Quite stock of exceptional simply, of for recent continues we competitors do deep-pocketed and The the market to great our undervalue challenges and believe the value unregulated market remains reflect many all that company. business. Gray prices business an because our broadcast

purchases, all future recently million stock belief we market some $XXX and the should million our of As have beyond. paydown. of know, authorization, X confirm in a open our These in XXXX reported collective $XXX moves the company of in you purchase debt insider stock the shares million repurchase and

next be more the stock opportunity year. remains this to an this we the a able time, the reinstituting $X while M&A to the Board further year, have activities, deleveraging company. over of the at at by same returning first deleveraging for believes shareholders in capital million in quarterly excess common invested In near dividend. for year, our future, begin that continue in priority the may same rest Absent our Gray time, for least of At fact, of this personally the I significant

conditions when Our credit Board a our has the this will, to formally in facility, return on hand. has, basis as falls Xx decided to decision up then If the our to a in anticipate It ratio, permit yet. leverage we resume to cash senior reached dividends. us will paying of it not the year, quarterly on will X-quarter trailing after dividend below as netting take Board half total however, to second this our this total defined were whether consider occur just issue

the this we that operator, questions. would So time, at you for ask line open

Operator

question from first Benchmark Thank line you. And from Kurnos our the of Dan comes Company. The

line Your is open.

Dan Kurnos

guys. morning. Good Great. Nice Thank you. sprint,

Just, Kevin, around the for all retrans. thanks color

to I certainly just Or you’re negotiating of to last one modest talk QX? guys assumptions too have But timing helpful. called – year? big I assumptions. just that and was for least – probably are have ahead – rate you And now have just the know generalized on about think at go an both you you’re got you it you color guys these around much sub the willing out give they in discussions that? on of all sub you since two And to more the year net are not negotiations net I generalized sort would be some think one the talk your back you QX. going us are ones know first. can I issue. Is in then major Thanks. if now, improvement

Kevin Latek

that Dan, two said, we Hi I agreements are under negotiation. major like have

of lower retrans X – you’ll the expect year. those will be QX’s in in see retrans That’s X. this impact see We will than why of gross the and gross second retrans you starting quarter QX, the

the year for trend digits. was sub down low Our single

had flat, If MVPDs and you base providers that sub completely of our OTT. number actually high-profile summer, the drops, a and was two exclude who this drops includes

not given have us cannot until a guide model the specific more our bigger both you guides we we know expect on give and declines What we and is resolved. gross we – year, to have retrans with for Internally, increasing always years, we and said because, many as this deals see from are conservative. working

looking essentially back all – contracts we retrospect. And XXXX imposed those retrans folks when we’re of the with reminded networks. also renewed in in our We those rates were that great

repriced, X of point to or rate year, on last be those and days in of NBCs, all year, But on expired repriced new deals January X our of at each XXXX year, we market of September of are some and repriced last July ABCs sort repriced that a there in last and FOX modern had X certain of CBS year We’ve about were net then entire by been couple a folks our being, felt for throughout that step-up step-up will the year. scattered retrans all we be because the step-ups were randomly year, this telling we year. impact took those – networks, XXXX, the of four a this. Point XXXX knew would a and last of be years

So year, net be challenged rephrase retrans higher to than is going more this that. – certainly much

will saying over in it Our year because reverse comp expect impact we the prior higher we’ve will certainly will the for the been That’s of net this this some how retrans rates. grow gross time and be than year year. grow was year retrans XXXX higher of full

Dan Kurnos

mouth just Got free understand Because to or capital And the more in Hilton, I not the this is want put paraphrase your market on you just is a to all words flow appreciate presenting a wrong That’s being it. right just super around issue. – uncertain the then yield. the helpful. hefty I rather the stock just color way. obviously, return, timing if especially cash of with now dividend.

just ongoing and the maybe political expectations on. decision because tempered the to that so fluid? around your conversations really it’s shapes I get are those And how and Is Or early? more buyback just up maybe so on aggressive the being early year mean, by

Hilton Howell

We ongoing they’re fluid. Well, every quarter. look things and at really

discussed Board yesterday. it Our

will. repurchase aggressive million bought quite debt and return, absent of then aggressively. with in stock first fourth the even shares to to it shareholder been even more down sort M&A significant our debt. more any and able in we’ll quarter think an X then come quarter, And like activity. reduced see have be of in we second and the We’d have in I We think, really And terms of do excess

Dan Kurnos

Thanks it. Got appreciate it. I guys,

Operator

next line from comes Our of Stephens. from question the Evans Kyle

is open. line Your

Kyle Evans

in and I been A core underlying basis? few you four-year the the trailing drivers attention local special Jim, a talk thanks. of behind – national? of a take about And weak on questions. growth have given it’s maybe minute And three-year, on maybe some and a national, Hi, Could how kind some follow-up.

Jim Ryan

some the and be improvement Yes. quarter, – first three some quarter In again, definitely sequential very been quarter. first we year. strong, and of continue auto. the but better than was It strong both Local was still in fourth to saw services it has quarters trailing, fourth in

categories legal, I that’s certainly, your bit kind bit better little think financial a in auto And medical than looking it So there. really been national, QX of is it driving little your in better, a had your in XXXX. again, is

Kyle Evans

the is XQ? looking for pacing overall like What

Jim Ryan

lower digits. you and for we’re FOX if the up – around Super displacement factor think It’s somewhere versus political CBS, the single I revenue on the for Bowl low

of February gate. March its I based a early. That flip-flopped Bowl footprint. a look was of on the pretty – little think is then out a misspoke. I looking but bit still And right sorry, – a it’s lot the January Super good was soft February, I’m January was pretty soft. little month, now, good

Pat LaPlatney

our what Pat. about Jim the it’s said of To underscore business. Kyle, piece services

first will roughly in same with same auto close health number the If you just are be of two, in as side, to combine number quarter the those the legal aggregate, XXXX.

idea the growth should of you areas. that So in give those an

Kyle Evans

Got XQ it’s and it. XQ where And auto, a of for you could gave outlook in talk what pacing XXXX is? your Jim, kind you about

Jim Ryan

XXXX, all the to excluding up a QX, very flattish it expect of fourth to to I little. low because quarter, – think down we’d of up see we’d the crowd-out. be for it expect we single digits, probably

all in to crowd-out. of be the We down expect QX cores because

would Just crowd-out Almost how much be? anybody’s now. guess right

better the than little last it the had gate, soft but year. out most For been of still quarter, a of

now again, mid-singles or right down bound worse than had year. pacing last it’s – So is it’s better the a which, than cases it just little,

Kyle Evans

guys. I it. Great. appreciate Thanks,

Operator

the Our Steven from Cahall Wells Fargo. comes next question of from line

open. is line Your

Steven Cahall

could I a in $XXX basis, revenue just kind If up XXXX. cash unpack think of combined political we million $XXX first, about guidance. on flow million the Jim, Maybe, around free historical you’ve got

maybe be But know $XXX help think about is what base cash might just flow isn’t else I revenue free million. XXXX around on, on margin. I XXX% going political think flow cash the us high the a Such million or million $XXX doesn’t side. look that more a I number million? that, And free of $XXX follow-up. got $XXX percentage then flow like cash plus a

Jim Ryan

Well, of expecting flow million. about as I $XXX earlier, operating cash an we’re said number

that network impact commented of Kevin year, year. renewed dividend $XXX to preferred getting a of $XX that, all the And year million we’ve over in repeatedly this we The impact big and interest, that was year last a XXXX. straightforward. be said agreements going pretty for earlier, we’re is cash pretty extended now As million full of

of million excluding reimbursable been all year. with CapEx, would $XX pretty for this year we’ve what repack is be that The last of saying consistent

– cash you the would had probably last about taxes is this approximate asked me think change million. the versus I $XX question have year, like more expectation we’re mid-summer the time $XX of my now year, last was expecting biggest really, that been, million it

the biggest that There’s you’re So not now what the delta – really from to. cash expecting tax pointing in taxes. probably cash estimate we’re much is change the what and

we XXXX that XXXX, in use we’ll good made picked through and XXXX, good that taking by gone expectation I a time certainly continuing we add XXXX that of asset have we still be – but we’re as sizable NOL are XXXX. XXXX, also was in of have we And We to the want benefit to Raycom and would of and be to valuable that. – the it’s a my probably of that just a the in start and use still We that make making still XX/XX. acquisition, up

Steven Cahall

the where the can that’s Kevin, Okay, anything delta of Is flow-through the there about else you And was QX like clear. And percent retrans a below the flat. XXXX? subs were or to I at cadence of blackouts? you us XXXX. that in few roughly Or some said think very beginning help with, just were just in then, you think

Kevin Latek

payments in sort were We Yes. had had in. be from of result that XXXX a We turned Steven, to of things some out number billing payments. too number of we in a adjustments that estimated low. QX, had of makeup audits of of MVPDs came resulted results that the that some

and for had. collection of processes a the We the also piece portion had changed MVPD some that of Raycom

the I addressed we this or we the call. So – received quarter second in third had think

benefited rest adjustment their go numbers, quarter The the year through distributors of it’s more is adjustments. true-up. first of Every a number we then and the the positive adjustments, onetime-only quarter, an of from audit first some

Sometimes it’s sometimes is negative, positive. that and

year, it to million dollars several was the positive. Last

to a MVPD, a the leaves was beneficial. but for from that that year, around, MVPD said very So – to could the If generally If somebody and And subs onetime large we the a some smaller right? reduce very, smaller steady a goes almost moving that’s only-QX last event. higher a date us rate, they but bigger MVPD and MVPD revenue. sub keep move a paid it’s

marketplace have are advertisers television. Those is fluctuations occurred. guys those competitive. That MVPD big always So on

why So around. of subs move higher do have But it’s because going quarter. And to is and a positive a that’s that we’re perfect quarter-to-quarter. were competitive market, adjustments made not of sort definitely QX that

Steven Cahall

is still bit valuation whole private you companies might see there with space the last do market, to Hilton. maybe yours? Could for And little you. the then active Great. private about a Thank devalued market? talk mean, you Very clear. over think an broadcast like last in us has different a for you been I what maybe few weeks. And in metrics the one just

Hilton Howell

will Yes, with and me. I’m sure up Kevin follow

look haven. money. to place television, should guys? good going be they I So First, at in people is a If safe terms broadcast kind of the a be to right, stocks move this they’re your quarantined, of watching all get this, is

have that know I have guys, in the has day, sort South or or in XX,XXX that’s the sort end the of I this States of no matter. announcement China for on something the mean, We people have the at out exposure months just of new XX that of discombobulated this last away Sacramento Iran markets. But in Korea we we or to the morning’s flu, passed have of fatality a yet any to there. have this virus from and United Italy,

either want still that? small, and There private is large opportunity. have M&A with a out operations. do for to we’re but there. of kind or now, always absolutely anything market to don’t any right up We at tell follow looking you looking Kevin, you quality good about always We’re opportunities

Kevin Latek

frankly, say remarks. points said just, the remember, not say, what’s sitting because of there’s the his data there’s on just lot will private a market in people I multiple as Yes. in sidelines, Hilton to are the

much that there’s not about so talking are people selling. And

would some local local local data or the can robust news of operator You’re location like no with station points going from on maybe news kind an X,XXX buy. heritage in one that to typically vary TV that stations news produced a we miles away

to dearth a out because in kind market private little there’s to points. a figure what might it’s today of data be of hard say the multiples complete So

that clear. to So no because to It’s right just that the there’s make I question – it’s question, we that the don’t not not we’re want the points unable answer to data just now. question answer answer it’s want to we

Steven Cahall

go TV. Thanks. Great. and I’ll watch

Operator

Our line of John from JK next Media. question the from comes Kornreich

open. line Your is

John Kornreich

is Some BCF quick questions. that’s or – That $XXX that OCF? million number,

Jim Ryan

cash flow, operating It’s John.

it’s… So

John Kornreich

will XX% you year? by the Right. On be retrans, the of end said that done

Kevin Latek

XX to I said XX XX% over months. next the

John Kornreich

to than OCF case XXXX gross should XXXX the and the be XXXX, will somewhat assume costs than XXXX programming it made, be XXXX. I retrans higher be will good stable that in higher you because a there’s in and hits Okay. be I because guess, much

Kevin Latek

John, have to political. we’re going million $XXX-ish not of Well,

Jim Ryan

XXXX. he said No,

John Kornreich

No, versus XXXX.

Kevin Latek

sorry, XXXX. am Oh, I

Jim Ryan

than our John, would So would be XXXX. better it yes, expectation that certainly XXXX be

we historical expected said better we said – XXXX as basis. combined than Just had XXXX would be on a we

John Kornreich

one on And other question Right. retrans.

third, of million? approaching Two fourth end That to clear. be quarters. year, By that. second, could the higher regard gross be $XXX should the you You made in retrans questions very

Kevin Latek

are to I I don’t are know large MVPDs. up two know are last these don’t until ones that. The what do deals, that rates know very, how I in the very

John Kornreich

Okay.

it will And is million? willing say now $XXX so than be all higher you’re to right

Kevin Latek

$XXX definitely forward. be each quarter higher It will going than million

John Kornreich

clear So XX.X%, versus quarter near is few XX% lower the the up in it to gross Or quarters? as XX%, year be that going margin, trending stable? worked in first it’s the was in. last contracts going XX.X% will which next Is very be term. net the The

Kevin Latek

the if contracts and be, are networks. should fees It gross goes our with X/X the two up. Remember, percentage our two of is networks half fixed

high at gross I that bit. margin if goes our would So improve expect a a should level, up,

John Kornreich

was thinking down? I improve? Should

Kevin Latek

bring bit that some a will I FOX of we of CBS, we is in believe the because more that retrans dollars keep additional the fixed. space, little space

we in extra it. an or keep on FOX, a bring So penny CBS we

some trigger up So contracts going some obviously of revenue. are obviously, retrans percentage the they of bump a NBC, to – basis. ABC, bump FOX up Others, CBS, while

not helpful. So to necessarily that’s going be

John Kornreich

got it. I

call in helpful. clarification this was extremely retrans Your on

for spooked retrans. your change As little on any super helpful. investors in you know, Thanks get

Operator

next Our from Goss the Instructions] Jim line question Research. [Operator of comes from Barrington

is Your line open.

Jim Goss

frames latest Thanks. length to Kevin, retrans, things. I as the shorter? you’re time getting a as thought ask the long continuing with more you longer can they’re I at of in same you’re Are get same the doing I’d whether with the don’t retrans deal into And networks, the or couple length it the happen compare or about shorter? know time. contracts they

Kevin Latek

Yes.

three-year One of only with the deals networks few exceptions. does

bit or on stations little The has five-year we acquired catch for the that trying us longer to we’re of if little other on the end shorter get terms, network date. a up generally a been sometimes everybody bit same to some

on three big contracts the five-year terms. generally, So are

been very negotiations Our We have arbitrary with and believe contracts an lot. are We our we extensions. generous in deadline. a don’t retrans extend three years,

– when that is a new we our the think agreement rates typically, apply since extend contract, retroactively. I will retrans the

whether we standpoint. dollars get run, get XX, to we in it the a matter or done and us deal from the cents X, deal March year on a into So January done the doesn’t one long on minute

their From sensitive, and or vacation standpoint, frankly, fact MVPDs kids. are take to actually have helpful to to may think we more of respectful a negotiators be sometimes deal that personal that with have relationship the And other time-consuming. it’s more negotiations want issues deal with

accommodating. with day, time need them, and contract We be have sense relationship, the positive to I many going the get to done. and only years now, dispute without the us. any to we’re I’ve happy times end we’ve very to think, whatsoever. of say, very keep a At We had need days, the renewed last very, three here try we I’m and four problems So operator, they we the been one like that

they getting takes it keep than longer are, So taken think but to bit those negotiate I deal sometimes issues say the it period in think, mind, with they’re has a three think get it longer frankly, lot just to we period it and and takes even word than I three for to. I any roughly it’s that I used extending it’s a all complicated us I don’t distribution on don’t it. years, But ago. think to necessarily there. – The Jim? just done don’t to more that helpful, non-financial time think Is to agreement used years The of be harder are we’re issues come terms. rights the and negotiations. through

Jim Goss

runs are in talking into made through you’ve whether negotiations on and extra it’s it Have Yes, – spec, any Television. there I’d from assumption – you’ve far? thing Steyer. getting less about goes the that of in regard you and the lot Gray what Bloomberg is there as was out I how nothing respectable The been so assumptions that Is long conventions money is one it expect of than maybe any political. there everybody short? wondering to or other is a interesting, whether pretty

Kevin Latek

a early starting theoretically – From our general that if is known Tuesday, see because that candidates Yes. after we means nominee pretty the kind framed. spending it’s standpoint, advertising are on sides, Super of essentially both

On variety month takes other lot the And the known money to side opponents. other it not more is of attacking Super more or primary spending. maybe then Tuesday, candidate hand, if the you’ve goes spends convention, the a by and two it got even or another a

it’s one we other not another. way really There from Gray or standpoint, view positioned is And X/X presidential, different. we’re it’s still than happens Gray the of year, the our could benefit one Our standpoint. a is And than presidential. it is political say of better six much don’t to I dozen think as I way any half is, in uniquely remember be think, less whatever will this important either, kind as revenue.

the going have We races, of our this a year. seats of and well frankly, political high-profile as really, be really to Senate revenue that House bunch majority are

Hilton Howell

that. add just – just could to I me if Let

think that comments, quite Kevin’s remarkable. of there in couple were a think really I are things I

the Democratic If And to QX. board guidance excluding such with position you remarkable take you across the are where released we’re that XX. got then seat, reiterate, them which stations up. in up in from at the coming markets, And obviously, massively Senate once then a highest Republicans in have that numbers where our we’ve a level in we’ve what fourth states we in are have races again, XX%, on Democrat over got the the that regard markets are seats are and just to the going XX XX in our period political, currently of Trump that to billionaires, our we open, strong retake the we quarter have, still XX to of XXXX, got, be XX And House we they’ve out exclude big competitive.

going big duration. to the think for be it’s I and the So board across

Jim Goss

right. All very Thanks much.

Operator

Our Wells next from Fargo. Hebert question comes from of the Davis line

Your line is open.

Davis Hebert

here. end Hi, thanks in the fitting for me at

the second the canceled. then leverage hear a below Are commentary by encouraging the end the there? But And question Olympics think on to for leverage inventory about questions. the year. is, don’t be you Olympic of times case what’s give of us one-on-one sort potentially target? with a being four typical from your two quick comfortable some is NBC affiliate? One Thanks. And long-term that’s Just I you comments Discovery now. can games right base

Hilton Howell

going heard actually the Olympics continue. that we to Well, are

that the Committee Olympic that confirmed recently I week. have this and actually Japan think

going We the Brazil time it’s hullabaloo a never Zika and so And forward. materialize. really the that around, didn’t battle was had of last to problem that in bunch

Jim Ryan

and in think among levels mean, we’re out, stock. the like X.X stress down exactly farther the that, large very down how a any in if as come to coming As I may the X.X bit a Xs LX wasn’t up, year, leverage by preferred At on not an peer it some maybe we basis. getting leverage I it know the with the the it’s come we we opportunistic the are to levered end going there point, space, everybody yes, don’t but – be down, is goes, on the levered. I lowest of we’re to maybe, road If Certainly, more. little will range us. the still very else little lowest far down M&A, comfortable for be probably maybe,

very getting a comfortable look we’ll of at certainly, is south that. range. But into So four anything

Davis Hebert

is Okay. preferred at redeemable you. the Is that correct? And Thank par.

Jim Ryan

Yes. In at in par. had – at answer whole don’t inventory discretion sole our you question know if Kevin or about a in part, to your I wants Olympics.

Kevin Latek

let No, I will Pat take that.

be the it this will a mean, I Olympics, summer. part. So in be load meaningful will meaningful, inventory NBC revenue

Pat LaPlatney

Yes.

Kevin Latek

We political should But in our Political advertising. to goes probably way local there. be going have advertisers news to no – happens. still to way some Olympics our political be and content. quantify away, we’re advertising It will if could syndicated find what the

Pat LaPlatney

money be Yes, going way. there it in would usually of either but be difficult ton left Olympics, Look, little you a a to there’s to get quantify. out

And so off. ways quite a we’re and

happens. what see we’ll So

Davis Hebert

much color. the so Thanks great. Okay, for

Operator

presenters And we questions have for closing turn back the further to queue. remarks. I no in

Hilton Howell

safe I to Like taking in everyone your during today markets. for our time thank a Well, want I said, day another haven. listen, valuable great tumultuous we’re just

the back talk broadcast come and next we’ll Thank quarter. you So to to stocks. you,

Operator

for participating. Thank conference you and Ladies this call. gentlemen, today’s concludes

may You disconnect. now

Gray Television (GTN) 27 Feb 202019 Q4 Earnings call transcript